The pattern of companies that were affected by short selling and...

The pattern of companies that were affected by short selling and margin call related further price drops (AFG, ABC, etc) (ie breaching the margin covenants of directors who hold stocks in their own company) was the same:

1) Find out which companies have such holdings
2) Wait for some bad news to acutely drive the share price down (has to be a significant fall)
3) Continue the pressure with sustained short selling
4) See if you can breach the margin limits and thus cause a significant second wave of falls as stock is forced on to the market.


So it pays to look to see if a company is vulnberable to such tactics - difficult if the directors dont report how their holdings are managed. At least TSE does, and the holdings aren't too large.


With TSE falling (25%) then a further 7% (and Fridays falls to near $9 being very worrying before the rally), it is not unreasonable to ask if there is something else going on.


I have no idea whether the falls have been overdone - especially on the back of the DOW falls following on from a profit warning (I hope so, as I have been buying). BUT you are a fool if you dont start to question why a stock falls 5 (and was going to be 6) days in a row, especially with the lack of buying support that we were seeing, and the tendency for the small retail buyers to be hammered down by very large sell orders every time there was some sort of a rally.

J.